Unfortunately for many of us, at some point in our lives we find that we are presented with unexpected challenges. This may be financial hardship, health problems, social challenges or otherwise. It may be that one’s own health may decline, a loved one may become ill or someone in the family loses a job. Coping with these types of challenges and overcoming them are often the most challenging times in a person’s life.
These circumstances become even more difficult if compounded with financial trouble. However, with proper foresight, it is possible to prepare and budget for such challenges. First and foremost, budgeting is critical to maintaining a healthy financial life, particularly in times of personal crisis. Moreover, by maintaining a sensible attitude in relation to money, you will be able to help alleviate an otherwise difficult problem.
If you are facing financial difficulties that must be addressed immediately, you may consider taking out a short term loan or other short term financial solution. Short term loans are expensive though, and cannot serve as a long-term solution for enduring financial troubles. If you are a property owner, you may decide to remortgage your property to release some equity in the medium term.
Create an Emergency Fund
One of the most important steps to budget for life’s challenges is to create an emergency fund. Your emergency fund will comprise a substantial amount of money set aside for unexpected emergencies, which could help circumvent the need for an emergency loan. It will usually take a number of years and some sacrifices in your day to day life to save up enough to suffice as an effective emergency fund. However, it is something that can in the future, pay massive dividends and keep you and your loved ones afloat for some time.
Experts recommend that your emergency fund should range from about £500 per month, to as much as half of your yearly income. It is imperative to think about your income in terms of the number of months it can cover in reality. Your emergency fund should be able to cover your daily expenses for between three and six months. However, it is likely that should you need to dip into the emergency fund, that you will need to be a little bit more frugal than usual to keep yourself afloat.
How to Save for an Emergency Fund
Whilst saving as much as £50 per month or more, is a lot of money to be able to set aside and not touch until emergencies arise, depending on your salary it is possible to achieve. It’s important to remember that by having an emergency fund, you may be able to avoid payday loans altogether. There are a number of very useful ways in which you can increase your savings and get into the habit of saving and planning sensibly. Whether with a UK cash ISA, a savings account or some sensible planning, building up a fund for the unknown really can be possible.
Navigating Daily Expenses When Unwell
Navigating your finances can become much more of a challenge when you or one of your nearest and dearest are unwell. Physical and emotional fatigue can easily creep in and take a severe toll on your health and well being and it is crucial to keep on top of such possibilities. Proper foresight can help you manage these challenges ahead of time so you do not have to worry during stressful times.
Be aware of your legal entitlements – In the UK, you are entitled to a variety of disability and sickness benefits from both the government and your employer. Making yourself aware of these benefits will help you utilise services and help advocate for yourself and your needs should the worst happen. For example, you may be entitled to compassionate leave, sickness leave and statutory pay, depending on your employment and contractual obligations.
Were you injured at work? – Look into the options of compensation from your employer. If you become injured or unwell at work as a direct result of your work or the workplace, there may be grounds for you to receive sometimes significant compensation. This may help you to subsidise the lost income resulting from the injury or illness whilst you are off work.
Understand the requirements of your condition – Take the time to read about your condition or illness extensively and be sure to visit a medical professional to get an expert diagnosis and prognosis. Perhaps the symptoms can be mitigated through diet, rest or exercise, allowing you to continue your life unimpeded for the future. Knowing the precise details of your condition and all that may come with it will help you take care of your body, mind and well being, which may allow you to continue to work in some capacity.
Address your psychological needs – One of the most difficult aspects of going through a financial or other crisis is the toll it can take on peoples’ mental health and well being. It is therefore important that you address your needs in this regard. There are ample resources for people suffering with illnesses to help you cope. You may also benefit from connecting with other people who are suffering from similar conditions. Find a support group of peers who are experiencing a similar situation to yours.
Communicate Effectively with Your Employer
Employers across most industries are very likely to be understanding of your situation if you communicate with them before appointments and required absences from work. An employer wants to know that you are a dependable and loyal employee. Therefore, keeping an open dialogue will help them trust you. This may also help you protect your position, even when a condition prevents you from working long hours or for a prolonged period of time.